EU Parliament Rejects Key Deforestation Rule

In a huge blow to the European Commission's flagship green policy, the European Parliament has voted to reject the proposed country risk classification system of the EU Deforestation Regulation (EUDR), one of the core components set to inform companies' due diligence criteria for the import and export of deforestation-linked commodities. The July 10, 2025, decision has caused alarm in green activists and business groups, who worry that it will lead to serious delays in applying the rule, which takes effect in December for larger firms.

The centre-right European People's Party (EPP)-dominated motion was approved with 373 votes in favour, 289 against, and 26 abstentions. It denounces the European Commission's approach to categorizing states into "low," "standard," and "high" risk. EPP lawmakers argue that this classification is incorrect and based on outdated and erroneous information, distorts the true deforestation picture in most member states and imposes unnecessary burdens on farmers, foresters, and industry operators within and outside the EU.

Harnessed in 2021, the EUDR proposes to phase out deforestation commodities like palm oil, beef, timber, cocoa, coffee, rubber, and soy from EU markets. The commodities have to be traced to the exact plot of land upon which they were grown, that they were not cultivated on cleared land after December 31, 2020. It also requires adherence to relevant legislation at the local level.

Among the regulation aspects is the country benchmarking mechanism, which would establish the level of due diligence expected of firms based on the risk of deforestation in the source nation. The suggested mechanism categorizes nations into three classes of risk—low, standard, and high—that are distinguished by varying levels of due diligence. The critics say that the three-tiered model is oversimplified and fails to capture the realities on the ground.

The system currently classifies a mere four nations—Belarus, North Korea, Russia, and Myanmar—as "high risk." At the same time, nations that have widely reported deforestation issues, including Brazil, Indonesia, and the Democratic Republic of Congo, are classified as "standard risk." The entire EU membership is now classified as "low risk." This has been condemned in vitriolic terms by legislators and interests, who criticize the consistency and logic of the system.

EPP MEP Alexander Bernhuber, who put the motion on the table, claimed that the Commission's approach does not take into account existing land-use maps and forest deterioration tendencies. He recommended adding a "no risk" category for those countries that possess stable or expanding forest ranges and claimed that this would render the EUDR more reasonable and plausible for stakeholders. "The Commission's list distorts reality in most countries and puts an unfair burden on farmers, foresters, and industry," Bernhuber insisted in the course of the debate. He directly asked why Ivory Coast—a nation where illegal cocoa-related deforestation cases had been reported—was not included in the "high risk" list.

The cuts in the benchmarking system have raised alarm among green groups, who are worried the action delays the deadline for the regulation. Greenpeace threatened that it would be in practice unfeasible to create a better method on schedule by December 30, 2025. "It is unlikely that the Commission will be able to submit a new methodology in time," stated Sigrid Deters, Forests Campaigner at Greenpeace. She continued that although the rule would be faulty, it should nonetheless still be adopted on schedule and assessed in 2026 as agreed.

In spite of the vote, the European Commission is not legally obligated to respond to Parliament's resolution. Increasing pressure is building from EU agriculture ministers and lobby groups, though, to render the regulation more realistic and less onerous. Some member states have complained about the administrative issues created by the existing rules and begged for an overhauling approach to facilitate easy compliance throughout the whole supply chain.

There is also mounting political pressure on the regulation. MEP Jonas Sjöstedt of The Left assailed the EPP for progressive word games meant to reduce environmental protection. "They present progressive rhetoric but fundamentally they wish to dismantle this," he claimed, likening the EPP's strategy to a "moonwalk"—the appearance of moving forward while going backward.

The EPP members reacted by claiming that they do not aim at delaying the EUDR but at requesting technical changes that should be made immediately and make the system more efficient. Bernhuber requested the Commission to introduce a new proposal for a revised system by September at the latest, or in early October, and any further delay would threaten the entire regulatory system.

The EUDR itself is already planned to enter into force on December 30, 2025, for large entities, and on June 30, 2026, for micro-enterprises and small enterprises. But with the classification regime in the spotlight and no apparent alternative having been proposed, the fate of the regulation cannot be certified. Deforestation-related product companies are now on tenterhooks, waiting to find out when and how they are going to have to comply with one of the EU's most ambitious environmental regulations to date.